Piper Jaffray Companies Announces Sale of Private Client Services Branch Network to UBS
April 11 2006 - 1:00AM
PR Newswire (US)
MINNEAPOLIS, April 11 /PRNewswire-FirstCall/ -- Piper Jaffray
Companies (NYSE:PJC) today announced the signing of a definitive
agreement to sell its Private Client Services branch network to UBS
AG. The sale will include 100 percent of the Piper Jaffray Private
Client Services branch network, which consists of more than 800
financial advisors and 550 branch support personnel in
approximately 90 retail offices in 17 Midwest, Mountain and Western
states. The consideration includes $500 million in cash for the
branch network plus the potential for additional cash consideration
of up to $75 million after the sale closes, dependent on business
performance. In addition, Piper Jaffray will be paid for the net
assets of its branch network at the time of the close, which are
expected to be valued at approximately $300 million. The Private
Client Services business offers financial planning and wealth
management services for individuals. Piper Jaffray Companies will
continue to operate its Capital Markets businesses, which include
Corporate and Institutional Services and Public Finance Services.
"This sale will be the culmination of a thoughtful and
comprehensive process, during which we concluded that this
strategic direction will ensure that each of the business segments
will have the necessary resources to achieve sustainable,
competitive performance," said Andrew Duff, chairman and CEO of
Piper Jaffray Companies. "This transaction will create the best
overall result for our clients, employees and shareholders." The
sale will position the firm's heritage business in Private Client
Services for future success. "We believe UBS will provide Private
Client Services clients with some of the best wealth management
services in the world, and will provide our transferred employees
with a culture and strategy similar to the one we have at Piper
Jaffray," said Duff. The transaction will enable Piper Jaffray to
focus all of its human and financial capital on one goal-becoming
the leading middle-market investment bank. "This is an outstanding
opportunity to build on the successful foundation we've established
in the capital markets," said Duff. Piper Jaffray will redeploy
capital from the transaction to enhance existing businesses, expand
into new businesses that support current strategies, pay down debt,
and repurchase common stock. "We will dedicate the appropriate
resources to manage this transition smoothly for our clients as
well as for the employees affected by this divestiture," said Duff.
As part of this transaction, Piper Jaffray anticipates a reduction
in staff of approximately 350 employees primarily in the Twin
Cities, and will provide enhanced severance packages and
out-placement services for those affected. The sale of the Piper
Jaffray Private Client Services branch network will result in
after-tax proceeds of approximately $510 million and an after-tax
book gain of approximately $170 million, net of approximately $55
-- 60 million in restructuring charges. Subject to customary
regulatory approvals, the sale is expected to close early in the
third quarter of 2006. Investor Conference Call Andrew S. Duff,
chairman and chief executive officer, and Sandra G. Sponem, chief
financial officer, will host a conference call to discuss the
transaction on Tuesday, Apr. 11, 2006, at 11 a.m. ET (10 a.m. CT).
The call can be accessed by dialing (866) 244-9933, or (706)
758-0864 international, and referring to conference ID 7868273 and
the leader's name, Andrew Duff. Slides that accompany the call can
be accessed at http://www.pjcinvestorinformation.com/analystsdeck.
Callers should dial in at least 15 minutes early to receive
instructions. A replay of the conference call will be available
beginning at approximately 1 p.m. ET Apr. 11 by calling (800)
642-1687 or (706) 645-9291 international. About Piper Jaffray
Companies Piper Jaffray Companies (NYSE:PJC) is a focused
securities firm dedicated to delivering superior financial advice,
investment products and transaction execution within selected
sectors of the financial services marketplace. The company's
Capital Markets business generates revenue through two groups,
Corporate and Institutional Services and Public Finance Services.
Through its chief operating subsidiary, Piper Jaffray & Co.,
the firm has served corporations, government and non-profit
entities, institutional investors, and the financial advisory needs
of private individuals since 1895. Piper Jaffray is headquartered
in Minneapolis. For more information about Piper Jaffray, visit us
online at http://www.piperjaffray.com/ . Cautionary Note Regarding
Forward-Looking Statements Statements contained in this press
release that are not historical or current facts, including
statements about beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties, and important factors could cause actual results to
differ materially from those anticipated, including the following:
(1) the transaction announced in this press release may not be
completed, or completed within the expected timeframe; (2)
unforeseen difficulties associated with the transaction, including
business disruption and loss of personnel, could delay completion
of the transaction and/or cause it to be more expensive than
anticipated and adversely affect our results of operations and
financial condition; (3) the expected benefits of the transaction,
including the growth of our Capital Markets business, increased
profitability and shareholder returns, may take longer than
anticipated to achieve and may not be achieved in their entirety or
at all; (4) strategies with respect to the redeployment of
transaction proceeds may take longer than anticipated to be
realized or may not be achieved in their entirety or at all; (5)
following consummation of the transaction we may be subject to
increased competitive pressures and experience increased volatility
in our financial results; and (6) other factors identified under
"Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2005, and updated in our subsequent
reports filed with the SEC. These reports are available at our Web
site at http://www.piperjaffray.com/ and at the SEC Web site at
http://www.sec.gov/. Forward-looking statements speak only as of
the date they are made, and we undertake no obligation to update
them in light of new information or future events. Since 1895.
Member SIPC and NYSE. Piper Jaffray & Co., 800 Nicollet Mall,
Suite 800, Minneapolis, Minnesota 55402-7020 DATASOURCE: Piper
Jaffray Companies CONTACT: Investor Relations, Jennifer A.
Olson-Goude, +1-612-303-6277, Media Relations, Stephanie Fox,
+1-952-851-7241, or Mark Holterhaus, +1-952-851-7231, both of
Tunheim Partners Web Site: http://www.piperjaffray.com/
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